StemCells, Inc. Announces Initiatives to Advance Cell-Based Technologies for Pharmaceutical Industry and Research Applications

StemCells, Inc. (NASDAQ:STEM) today announced organizational initiatives focused on growing its specialty SC Proven^® cell culture product business and advancing the development and commercialization of its central nervous system (CNS) cell-based assay platforms for use in drug screening and drug development. These initiatives reflect the Company’s ongoing integration of the operations acquired from Stem Cell Sciences (SCS) Plc in April, and include new personnel appointments and a realignment of activities within the Company’s Cambridge, UK and Palo Alto, California locations.

"The acquisition of the SCS operations solidifies our leadership position in the neural cell field and provides us with nearer-term commercial opportunities through non-therapeutic applications of our combined cell-based technology platforms,” said Martin McGlynn, President and CEO of StemCells, Inc. "The actions we are now taking will centralize and focus specific platforms and personnel at specific sites to more effectively leverage our various capabilities. By aligning the appropriate expertise and resources, these initiatives will better position us to execute this strategic agenda and to realize the growth potential of our cell-based enabling technologies.”

The Company is leveraging multiple stem cell technology platforms that include embryonic stem cells, induced pluripotent stem cells and tissue-derived (adult) stem cells. StemCells will refocus and add to its research and development of cell-based assays, and better align those efforts with its scale-up and manufacturing of cells and assays for drug screening and drug development, including using its automated cell culture platform that enables large-scale production for medium-throughput screening of drug candidates.

StemCells is also investing to grow its revenue-generating SC Proven cell culture product business. Sales of SC Proven products have grown rapidly in 2009 compared to the same period in 2008. StemCells will seek to continue expanding this business by focusing on increasing penetration into the growing U.S. stem cell research market, as well as broadening its portfolio of cell culture products through the development and acquisition of new products. Development and manufacturing of SC Proven products will continue to be based in the Company’s Cambridge, UK location.

As part of its efforts to streamline operations post-acquisition, StemCells recently completed a wind-down of Stem Cell Sciences’ operations in Melbourne, Australia, and has transferred the scientific programs previously underway in Melbourne to Palo Alto and Cambridge.

In line with the organizational initiatives announced today, StemCells has made the following personnel appointments:

David Flanders, Ph.D. has been appointed Site Head to oversee the Company’s Cambridge, UK operations. Dr. Flanders has more than 20 years of international management experience leading diverse teams in the biotechnology industry, and previously had been employed by the Company in a consulting capacity to coordinate its participation in a number of European Union Grant Consortia. He received his Doctorate degree in Cell and Developmental Biology from the Australian National University.

Thorsten Gorba, Ph.D. has been appointed Director of Central Nervous System (CNS) Assay Screening and Development to lead the Company’s cell-based assay research and development efforts. Dr. Gorba’s responsibilities will include establishing a multidisciplinary project team to develop and test high quality cell-based assays for automated drug screening and profiling. Dr. Gorba has a Doctorate degree in Developmental Neurobiology from the Ruhr-University Bochum, Germany, and more than 10 years of post-doctoral experience in cell and molecular biology, developmental and molecular neuroscience, neural and embryonic stem cell research and in vitro assay development. Dr. Gorba will be based in Palo Alto.

Paul Bello, Ph.D. has been appointed Head of Stem Cells and Media Systems to lead the evaluation and research and development efforts for the Company’s cell-based technologies for use by academia and the pharmaceutical industry. Dr. Bello, who will be based in Cambridge, will also serve as Director, Technology Integration to facilitate the integration of scientific knowledge and research between the Company’s two locations. Dr. Bello previously was responsible for overseeing the scientific programs at Stem Cell Sciences’ Melbourne, Australia Research Center, a position he held from 2005 until July 2009 when the Melbourne facility closed. Dr. Bello has a Doctorate degree in Biochemistry, Molecular and Cellular Biology and Endocrinology from the University of Melbourne, Australia, and more than 15 years of experience in cellular research, recombinant protein and stem cell product development, cell-based screening platforms and assays, and facilities management.

Donna McLaren has been appointed Head of Product Development and Production to oversee the development and manufacture of the SC Proven cell culture media products as well as the commercial application of the Company’s neural cells and cell-based assays for drug screening and drug development. Ms. McLaren is based in Cambridge. Ms. McLaren joined Stem Cell Sciences in March 2006, and has more than 10 years of experience in stem and progenitor cell-based assay development in the pharmaceutical sector. She earned her Masters degree in Cell Biology from the University of Cincinnati, Ohio.

Dawn Fisher, Ph.D. has been appointed Licensing Associate and will be responsible for integrating the SCS intellectual property portfolio into StemCells, Inc., providing ongoing intellectual property and licensing support for the Company’s cell-based technologies, and helping to identify any suspected infringement of the Company’s patent portfolio. Dr. Fisher first joined Stem Cell Sciences in August 2005 as a research scientist, and has been serving as intellectual property coordinator since February 2008. She received her Doctorate degree in Embryonic Stem Cell Research at the Institute for Stem Cell Research (ISCR) Edinburgh, and has more than eight years of cell isolation, culturing and intellectual property experience. Dr. Fisher will be based in Palo Alto.

About StemCells, Inc.

StemCells, Inc. is focused on the development and commercialization of cell-based technologies. In its cellular medicine programs, StemCells is targeting diseases of the central nervous system and liver. StemCells’ lead product candidate, HuCNS-SC^® cells (purified human neural stem cells), is in clinical development for the treatment of two fatal neurodegenerative disorders that primarily affect young children. StemCells also markets specialty cell culture media products under the brand SC Proven^®, and is developing its cell-based technologies for use in drug discovery and drug development. The Company has exclusive rights to approximately 55 issued or allowed U.S. patents and approximately 200 granted or allowed non-U.S. patents. Further information about StemCells is available on its web site at www.stemcellsinc.com.

Apart from statements of historical fact, the text of this press release constitutes forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and is subject to the safe harbors created therein. These statements include, but are not limited to, statements regarding the potential for the Company to grow its cell culture media business and to advance the development and commercialization of its cell-based assay platforms for use in drug screening and drug development; the Company’s ability to leverage the combined cell technology platforms and capabilities of SCS and StemCells, Inc. to add nearer-term commercial opportunities through non-therapeutic applications of its cell technologies; and the future business operations of the Company, including its ability to conduct clinical trials as well as its other research and product development efforts. These forward-looking statements speak only as of the date of this news release. The Company does not undertake to update any of these forward-looking statements to reflect events or circumstances that occur after the date hereof. Such statements reflect management’s current views and are based on certain assumptions that may or may not ultimately prove valid. The Company’s actual results may vary materially from those contemplated in such forward-looking statements due to risks and uncertainties to which the Company is subject, including uncertainties regarding the Company’s ability to obtain the increased capital resources needed to continue its current and planned research and development operations, including such operations of the Company for non-therapeutic applications; the prospects for the Company to pursue non-therapeutic applications of its cell-based technologies; uncertainties regarding the Company’s ability to commercialize a cell-based assay platform or a therapeutic product and its ability to successfully compete with other products on the market; and other factors that are described under the heading "Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, and in its subsequent reports on Form 10-Q and Form 8-K.